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Large London housing association books £106m surplus despite falling sales and development income
Notting Hill Genesis (NHG) has booked a surplus of £106.1m for the last financial year, despite a sharp fall in turnover from sales and development.
The G15 landlord’s latest accounts showed that sales and development revenue has fallen from £254.9m in 2021-22 to £108.8m in the year to the end of March 2023.
During the year, the landlord completed a review of its ongoing development projects.
This resulted in a stock write-down of four schemes under development and a write-down of four completed projects after factoring in a 5% reduction in the estimated sales price due to the current political and economic environment.
NHG completed 459 homes against a target of 1,087 in 2022-23, which is down on the previous year’s figure of 1,346.
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In addition, six schemes with a total of 626 homes were moved into the new financial year.
Starts were also down to 459 against a target of 1,428, and down on last year’s total of 1,385.
Overall turnover in the year to the end of March 2023 was £728.1m, down from £836.9m in the previous year.
This £108.8m decrease, the landlord explained, was due to the fall in sales and development revenue, but was offset by a £30m increase in core business turnover.
The overall surplus before tax was £106.1m, less than the comparable surplus in 2022 of £112.9m
NHG’s operating costs increased to £485.2m due to an increase of £40m in routine and planned maintenance, as well as higher management and service costs.
The landlord’s EBITA MRI fell to 167.8% and its operating margin on social housing lettings decreased from 25.2% to 18.8% in 2022-23, which is said was due to higher spend on both planned and routine repairs.
NHG said its surplus will help it improve its existing homes, provide better services to residents and continue to build more of the homes needed in London.
It also plans to spend £0.5bn over the next 10 years for investment on its social rent and care and support homes, alongside a further £157m for building safety work.
Patrick Franco, chief executive of NHG, said: “The group is financially strong with substantial liquidity and high demand for its core business.
“This financial strength will allow us to provide good-quality homes and estates and enable our residents to live their lives well, which is the key goal of our new Better Together strategy.”
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